Method and gui for creating optionality in a commodity contract settlement price

ABSTRACT

A computer method for creating optionality of price basis in a commodity contract includes establishing a smart contract for a transfer of a commodity using a distributed ledger and graphical user interface (GUI). The smart contract includes a variable price with a provision for a future determination of a price basis. The computer method includes receiving agreement on the smart contract between a seller and a counterparty, receiving a deposit on a total price from the counterparty, transferring at least a portion of the deposit to the seller, and transferring a token representing the smart contract to the counterparty. The computer method includes, at a future date, receiving a selection of the price basis for the smart contract from one of the counterparty or the seller, and notifying the other of the seller or the counterparty of the selected price basis and a resultant settlement price.

CROSS-REFERENCE TO RELATED APPLICATIONS

The present application claims priority benefit from co-pending U.S.Provisional Patent Application No. 62/776,953, entitled “SYSTEM ANDMETHOD OF CREATING OPTIONALITY IN A COMMODITY CONTRACT TIMING PERIODQUOTATION,” filed Dec. 7, 2018 (docket number 3058-009-02), whichapplication, to the extent not inconsistent with the disclosure herein,is incorporated herein by reference.

SUMMARY

According to an embodiment, a computer method and graphical userinterface (GUI) for creating optionality of a price basis in a commoditycontract includes displaying, on an electronic display of a user device,a GUI including an identifier of a commodity contract with a futuredelivery date. The identifier of the commodity contract may correspondto a smart contract having access thereto saved on a plurality ofcomputer readable memories as a distributed ledger transaction. Theplurality of computer readable memories may be disposed in acorresponding plurality of devices operatively coupled by a computernetwork. The computer method includes displaying, via the GUI, anindication that the smart contract includes a variable price with aprovision for a future determination of a price basis. The computermethod includes receiving and displaying, via the GUI, an informationobject indicating that an agreement on the smart contract between aseller and a counterparty was received by a server computer operativelycoupled to the user device and a counterparty device via the computernetwork. The computer method includes receiving and displaying, from theserver computer via the GUI, an indicator that a deposit on a totalprice for the commodity contract from the counterparty via thecounterparty device, The computer method includes receiving anddisplaying, from the server computer via the GUI, information that atleast a portion of the deposit was transferred to the seller as anelectronic currency transfer from a counterparty wallet into a sellerwallet, indicated in a seller wallet address field in the GUI. Thecomputer method includes receiving and displaying, from the servercomputer via the GUI, information that a token representing the smartcontract was transferred to a counterparty wallet. The computer methodincludes, at a future date, receiving and displaying, from the servercomputer via the GUI, information that a selection of the price basisfor the smart contract was received from one of the counterparty or theseller. The computer method includes receiving and displaying, from theserver computer via the GUI, information that the commodity contract wassettled by transferring a settlement amount of the electronic currencyinto the seller wallet or the counterparty wallet.

According to an embodiment, a computer method for creating optionalityof price basis in a commodity contract includes establishing a smartcontract for a transfer of a commodity. The smart contract includes avariable price with a provision for a future determination of a pricebasis. The computer method includes receiving agreement on the smartcontract between a seller and a counterparty, receiving a deposit on atotal price from the counterparty, transferring at least a portion ofthe deposit to the seller, and transferring a token representing thesmart contract to the counterparty. The computer method includes, at afuture date, receiving a selection of the price basis for the smartcontract from one of the counterparty or the seller, and notifying theother of the seller or the counterparty of the selected price basis anda resultant settlement price.

BRIEF DESCRIPTION OF THE DRAWINGS

FIG. 1 is a flow chart showing a computer method for creatingoptionality of a price basis in a commodity contract, according to anembodiment.

FIG. 2 is a diagram of the graphical user interface (GUI) as describedin the computer method of FIG. 1, according to an embodiment.

FIG. 3 is a flow chart showing a computer method for creatingoptionality of a price basis in a commodity contract, according to anembodiment.

FIG. 4 is a block diagram of a computer system configured to administera commodity material transaction using a distributed ledger, accordingto an embodiment.

DETAILED DESCRIPTION

In the following detailed description, reference is made to theaccompanying drawings, which form a part hereof. In the drawings,similar symbols typically identify similar components, unless contextdictates otherwise. Other embodiments may be used and/or other changesmay be made without departing from the spirit or scope of thedisclosure.

As used herein, the term “seller” will be understood to be, as indicatedby context, interchangeable with “owner”, “offering party” or “user”.The “seller” will be understood to mean a user with authority to offer acommodity contract for sale, using a smart contract carried by adistributed ledger. The term “buyer” will be understood to be, asindicated by context, interchangeable with “counterparty” or “seconduser”. The “buyer” will be understood to mean a user with authority topurchase the commodity contract from the “seller”. The inventorscontemplate that commodity contracts may be bought and sold multipletimes before delivery to an ultimate user, and thus a user who is a“buyer” in a first transaction offering instance may become a “seller”in a second transaction offering instance.

FIG. 1 is a flow chart showing a computer method 100 for creatingoptionality of a price basis in a commodity contract, using a graphicaluser interface (GUI), according to an embodiment. FIG. 2 is a diagram ofthe GUI 206 described in conjunction with the computer method 100 ofFIG. 1, according to an embodiment. FIG. 4 is a block diagram of acomputer system 400 configured to administer a commodity materialtransaction using a distributed ledger, according to an embodiment.

Referring to FIGS. 1, 2, and 4, according to an embodiment, a computermethod 100 for creating optionality of a price basis in a commoditycontract includes, in step 102, displaying, on an electronic display 202of a user device 204, 404, a GUI 206 including an identifier 208 of acommodity contract with a future delivery date, the identifier 208 ofthe commodity contract corresponding to a smart contract having accessthereto saved on a plurality of computer readable memories as adistributed ledger transaction, the plurality of computer readablememories being disposed in a corresponding plurality of devices 410operatively coupled by a computer network. Step 104 includes displaying,via the GUI 206, an indication 414 that the smart contract includes avariable price with a provision for a future determination of a pricebasis. Step 106 includes receiving and displaying, via the GUI 206, aninformation object 210 indicating that an agreement on the smartcontract between a seller and a counterparty was received by a servercomputer operatively coupled to the user device 404 and a counterpartydevice 406 via the computer network. Step 108 includes receiving anddisplaying, from the server computer via the GUI 206, an indicator 212that of a deposit on a total price for the commodity contract from thecounterparty via the counterparty device 406. Step 110 includesreceiving and displaying, from the server computer via the GUI 206,information that at least a portion of the deposit was transferred tothe seller as an electronic currency transfer from a counterparty walletinto a seller wallet, indicated in a seller wallet address field 214 inthe GUI 206. Step 112 includes receiving and displaying, from the servercomputer via the GUI 206, information 216 that a token representing thesmart contract was transferred to the counterparty wallet. Step 114includes, at a future date, receiving and displaying, from the servercomputer via the GUI 206, information 218 that a selection of the pricebasis for the smart contract was received from one of the counterpartyor the seller. Step 118 includes receiving and displaying, from theserver computer via the GUI 206, information 220 that the commoditycontract was settled by transferring a settlement amount of theelectronic currency into the seller wallet or the counterparty wallet.

According to an embodiment, the computer method 100 and GUI 206 furtherincludes, in step 116, receiving the selection of the price basis fromthe seller.

According to an embodiment, the computer method 100 and GUI 206 furtherincludes receiving an electronic message into the counterparty device406.

According to one embodiment, the GUI 206 is directly driven by anapplication on the counterparty device 406 and data corresponding to theGUI 206 is received from the server computer. In another embodiment, theGUI 206 is directly driven by an application on the counterparty device406 and data corresponding to the GUI 206 is received by reading datafrom the distributed ledger.

According to an embodiment, the smart contract defines that the sellerhas the option to select between an average price of the commodity overa selected period of time or a benchmark price for the commodity on aselected day. The smart contract may be a futures contract. In oneembodiment, the selected day is a particular day the futures contractmatures.

According to an embodiment, receiving and displaying, from the servercomputer via the GUI 206, the information 218 that the selection of theprice basis for the smart contract was received, in step 114, includesreceiving and displaying information that the selection of the pricebasis was made by automatically selecting a highest available price.

According to an embodiment, the smart contract defines a rule by whichthe price basis is automatically selected at the future date. In oneembodiment, the rule defines that the price basis will automatically beselected as an available price basis most favorable to the seller on thefuture day. In another embodiment, the rule defines that the price basiswill automatically be selected as an available price basis mostfavorable to the counterparty on the future day.

According to an embodiment, if the settlement price is lower than thedeposit, the step of receiving and displaying the information 220 thatthe commodity contract was settled by transferring the settlement amountof the electronic currency into the seller wallet or the counterpartywallet, in step 118, includes receiving and displaying the information220 that the commodity contract was settled by transferring thesettlement amount of the electronic currency from the seller wallet tothe counterparty wallet. In another embodiment, if the settlement priceis higher than the deposit, the step of receiving and displaying theinformation 220 that the commodity contract was settled by transferringthe settlement amount of the electronic currency into the seller walletor the counterparty wallet, in step 118, includes receiving anddisplaying the information 220 that the commodity contract was settledby transferring the settlement amount of the electronic currency fromthe counterparty wallet to the seller wallet. In one embodiment, thedeposit and the settlement price are established in a cryptocurrency.The cryptocurrency may include one or more of Bitcoin, Ethereum, andXRP. In another embodiment, the deposit and the settlement price areestablished in a fiat currency.

According to an embodiment, the distributed ledger includes ablockchain. The blockchain may include one or more of a publicblockchain, a private blockchain, and a permissioned blockchain.

According to an embodiment, the smart contract is added to thedistributed ledger as an encrypted transaction. In one embodiment,adding the smart contract to the distributed ledger includes storing thesmart contract at one or more cloud locations, encrypting the one ormore cloud locations, and entering the encrypted one or more cloudlocations onto the distributed ledger as a transaction.

According to an embodiment, the commodity is a physical commodity. Inone embodiment, the physical commodity includes one of a refined fueland an unrefined fuel. The refined fuel or the unrefined fuel mayinclude a fossil fuel. In another embodiment, the physical commodity isan unrefined or a refined mining extract. Additionally and/oralternatively, the physical commodity is a food.

According to an embodiment, receiving the selection of the price basis,in step 116, includes receiving the price basis from the counterparty.In an embodiment, notifying the other of the seller or the counterparty,in step 114, includes notifying the seller of the resultant settlementprice. In another embodiment, notifying the seller, in step 114,includes displaying a notification to the seller via the GUI 206 of acomputing system. Additionally and/or alternatively, notifying theseller, in step 114, includes sending one or more of an email, a textmessage, and a multimedia message to the seller. In another embodiment,notifying the seller, in step 114, includes outputting the price basisto an application on a seller device. Additionally and/or alternatively,notifying the seller, in step 114, includes writing the price basis tothe smart contract. According to an embodiment, the counterparty has theoption to select between an average price of the commodity over aselected period of time or benchmark price for the commodity on aselected day. In one embodiment, the smart contract is a futurescontract. In another embodiment, the selected day is a day the futurematures.

According to an embodiment, receiving the selection of the price basis,in step 116, includes automatically selecting a lowest available price.

FIG. 3 is a flow chart showing a computer method 300 for creatingoptionality of price basis in a commodity contract, according to anembodiment.

According to an embodiment, the computer method 300 for creatingoptionality of price basis in a commodity contract includes, in step302, establishing a smart contract for a transfer of a commodity. In anembodiment, the smart contract includes a variable price with aprovision for a future determination of a price basis. The computermethod 300 includes, in step 304, receiving agreement on the smartcontract between a seller and a counterparty. Step 306 includesreceiving a deposit on a total price from the counterparty. Step 308includes transferring at least a portion of the deposit to the seller.Step 310 includes transferring a token representing the smart contractto the counterparty. Step 312 includes, at a future date, receiving aselection of the price basis for the smart contract from one of thecounterparty or the seller. Step 314 includes notifying the other of theseller or the counterparty of the selected price basis and a resultantsettlement price.

According to an embodiment, in step 312, receiving the selection of theprice basis includes receiving the price basis from the seller.

According to an embodiment, in step 314, notifying the other of theseller or the counterparty includes notifying the counterparty of theresultant settlement price. In one embodiment, in step 314, notifyingthe counterparty includes displaying a notification to the counterpartyvia a graphical user interface (GUI) of a computing system. In anotherembodiment, in step 314, notifying the counterparty includes sending anemail to the counterparty. In a further embodiment, in step 314,notifying the counterparty includes sending a text message to thecounterparty. Additionally and/or alternatively, in step 314, notifyingthe counterparty includes sending a multimedia message to thecounterparty. In an embodiment, notifying the counterparty includesoutputting the price basis to an application on a counterparty device.In another embodiment, notifying the counterparty includes writing theprice basis to the smart contract.

According to an embodiment, the seller has the option to select betweenan average price of the commodity over a selected period of time orbenchmark price for the commodity on a selected day. In one embodiment,the smart contract is a futures contract. In an embodiment, the selectedday is a day the future matures.

According to an embodiment, in step 312, receiving the selection of theprice basis includes automatically selecting a highest available price.

According to an embodiment, the smart contract defines a rule by whichthe price basis will be automatically selected at the future date. In anembodiment, the rule defines that the price basis will automatically beselected as an available price basis most favorable to the seller on thefuture day. Additionally and/or alternatively, the rule defines that theprice basis will automatically be selected as an available price basismost favorable to the counterparty on the future day.

According to an embodiment, the computer method 300 further includes, instep 316, automatically transferring a balance of the settlement pricebetween the counterparty and the seller. In one embodiment, if thesettlement price is lower than the deposit, step 316 includestransferring a difference between the settlement price and the depositfrom the seller to the counterparty. Additionally and/or alternatively,if the settlement price is greater than the deposit, step 316 includestransferring the difference between the settlement price and the depositfrom the counterparty to the seller.

According to an embodiment, the deposit and the settlement price areestablished in a cryptocurrency. In one embodiment, the cryptocurrencyincludes Bitcoin. In another embodiment, the cryptocurrency includesEthereum. Additionally and/or alternatively, the cryptocurrency includesXRP.

According to an embodiment, the computer method 300 further includestransferring a net settlement value between the counterparty and theseller in the cryptocurrency. In an embodiment, the net settlement valueis a difference between the deposit and the settlement price.

According to an embodiment, the deposit and the settlement price areestablished in a fiat currency. In an embodiment, the computer method300 further includes transferring a net settlement value between thecounterparty and the seller in the fiat currency. In an embodiment, thenet settlement value is a difference between the deposit and thesettlement price.

According to an embodiment, in step 302, establishing the smart contractfor the transfer of the commodity includes establishing the smartcontract in a distributed ledger. In an embodiment, the distributedledger is stored on one or more computer readable media. In anotherembodiment, the distributed ledger includes a blockchain. In oneembodiment, the blockchain includes a public blockchain. In anotherembodiment, the blockchain includes a private blockchain. Additionallyand/or alternatively, the blockchain includes a permissioned blockchain.

According to an embodiment, the smart contract is added to thedistributed ledger as a transaction. In an embodiment, adding the smartcontract to the distributed ledger comprises encrypting the smartcontract. Additionally and/or alternatively, adding the smart contractto the distributed ledger includes storing the smart contract at one ormore cloud locations, encrypting the one or more cloud locations, andentering the encrypted one or more cloud locations onto the distributedledger as a transaction.

According to an embodiment, the commodity is a physical commodity. In anembodiment, the physical commodity includes one of a refined fuel and anunrefined fuel. In one embodiment, the refined fuel or the unrefinedfuel includes a fossil fuel. In another embodiment, the physicalcommodity is an unrefined or a refined mining extract. Additionallyand/or alternatively, the physical commodity is a food.

According to an embodiment, in step 312, receiving the selection of theprice basis includes receiving the price basis from the counterparty.

According to an embodiment, in step 314, notifying the other of theseller or the counterparty includes notifying the seller of theresultant settlement price. In one embodiment, notifying the sellerincludes displaying a notification to the seller via a GUI of acomputing system. In another embodiment, notifying the seller includessending an email to the seller. Additionally and/or alternatively,notifying the seller includes sending a text message to the seller. Inan embodiment, notifying the seller includes sending a multimediamessage to the seller. In another embodiment, notifying the sellerincludes outputting the price basis to an application on a sellerdevice. In another embodiment, notifying the seller includes writing theprice basis to the smart contract.

According to an embodiment, the counterparty has the option to selectbetween an average price of the commodity over a selected period of timeor benchmark price for the commodity on a selected day. In anembodiment, the smart contract is a futures contract. In an embodiment,the selected day is a day the future matures.

According to an embodiment, in step 312, receiving the selection of theprice basis includes automatically selecting a lowest available price.

FIG. 4 is a block diagram of a computer system 400 configured toadminister a commodity material transaction using a distributed ledger,according to an embodiment. As used herein, the term distributed ledgerwill be understood to include blockchains of various ilks. Illustratedelements described in conjunction with this figure may be describedelsewhere herein and may bear dissimilar reference numbers.Corresponding elements will be understood as equivalent as indicated bycontext.

According to an embodiment, the computer system 400 may include a webserver 402 configured to output a first GUI to a first device 404 for aparty to receive and display information related to a commodity materialtransaction smart contract, according to an embodiment. The web server402 may be further configured to output a second GUI to a second device406 for a counterparty to receive and display information related to acommodity material transaction smart contract, according to anembodiment. The computer system 400 may include a server computer 408,operatively coupled to the web server 402, and configured to executedata transfer and distributed ledger transactions. The server computer408 may be further configured to transmit display data to and receiveuser input from the web server 402, for relay to and from the first andthe second devices 404, 406.

According to an embodiment, the computer system 400 may include aplurality of devices 410 operatively coupled to the web server 402 andcarrying the distributed ledger. The web server 402 may be configured totransmit the distributed ledger transactions to the plurality of devices410, according to an embodiment. The plurality of devices 410 may beconfigured to collectively validate the distributed ledger transactions,according to an embodiment. The web server 402 may be configured toreceive and forward collective validation to the server computer 408,according to an embodiment.

According to an embodiment, the server computer 408 may be furtherconfigured to transfer a first cryptocurrency and/or digital securityassociated with commodity transactions corresponding to transactionsbetween a counterparty wallet 412 and a transaction wallet 414 via theweb server 402. The server computer 408 may issue a distributed ledgertoken corresponding to one or more commodity material transactions,according to an embodiment.

While various aspects and embodiments have been disclosed herein, otheraspects and embodiments are contemplated. The various aspects andembodiments disclosed herein are for purposes of illustration and arenot intended to be limiting, with the true scope and spirit beingindicated by the following claims.

1-42. (canceled)
 43. A computer method for creating optionality of pricebasis in a commodity contract, comprising: establishing a smart contractfor a transfer of a commodity, the smart contract including a variableprice with a provision for a future determination of a price basis;receiving agreement on the smart contract between a seller and acounterparty; receiving a deposit on a total price from thecounterparty; transferring at least a portion of the deposit to theseller; transferring a token representing the smart contract to thecounterparty; at a future date, receiving a selection of the price basisfor the smart contract from one of the counterparty or the seller; andnotifying the other of the seller or the counterparty of the selectedprice basis and a resultant settlement price. 44.-51. (canceled)
 52. Thecomputer method for creating optionality of price basis in a commoditycontract of claim 43, wherein the seller has the option to selectbetween an average price of the commodity over a selected period of timeor benchmark price for the commodity on a selected day.
 53. The computermethod for creating optionality of price basis in a commodity contractof claim 52, wherein the smart contract is a futures contract.
 54. Thecomputer method for creating optionality of price basis in a commoditycontract of claim 53, wherein the selected day is a day the futurematures.
 55. The computer method for creating optionality of price basisin a commodity contract of claim 43, wherein receiving the selection ofthe price basis includes automatically selecting a highest availableprice.
 56. The computer method for creating optionality of price basisin a commodity contract of claim 43, wherein the smart contract definesa rule by which the price basis will be automatically selected at thefuture date.
 57. The computer method for creating optionality of pricebasis in a commodity contract of claim 56, wherein the rule defines thatthe price basis will automatically be selected as an available pricebasis most favorable to the seller on the future day.
 58. The computermethod for creating optionality of price basis in a commodity contractof claim 56, wherein the rule defines that the price basis willautomatically be selected as an available price basis most favorable tothe counterparty on the future day.
 59. The computer method for creatingoptionality of price basis in a commodity contract of claim 43, furthercomprising: automatically transferring a balance of the settlement pricebetween the counterparty and the seller. 60.-70. (canceled)
 71. Thecomputer method for creating optionality of price basis in a commoditycontract of claim 43, wherein establishing the smart contract for thetransfer of the commodity includes establishing the smart contract in adistributed ledger.
 72. (canceled)
 73. The computer method for creatingoptionality of price basis in a commodity contract of claim 71, whereinthe distributed ledger includes a blockchain. 74-76. (canceled)
 77. Thecomputer method for creating optionality of price basis in a commoditycontract of claim 71, wherein the smart contract is added to thedistributed ledger as a transaction.
 78. The computer method forcreating optionality of price basis in a commodity contract of claim 77,wherein adding the smart contract to the distributed ledger comprisesencrypting the smart contract.
 79. The computer method for creatingoptionality of price basis in a commodity contract of claim 77, whereinadding the smart contract to the distributed ledger comprises: storingthe smart contract at one or more cloud locations; encrypting the one ormore cloud locations; and entering the encrypted one or more cloudlocations onto the distributed ledger as a transaction.
 80. The computermethod for creating optionality of price basis in a commodity contractof claim 43, wherein the commodity is a physical commodity.
 81. Thecomputer method for creating optionality of price basis in a commoditycontract of claim 80, wherein the physical commodity includes one of arefined fuel and an unrefined fuel. 82-90. (canceled)
 91. The computermethod for creating optionality of price basis in a commodity contractof claim 43, wherein notifying the seller includes outputting the pricebasis to an application on a seller device.
 92. (canceled)
 93. Thecomputer method for creating optionality of price basis in a commoditycontract of claim, wherein the counterparty has the option to selectbetween an average price of the commodity over a selected period of timeor benchmark price for the commodity on a selected day.